WHAT FOREIGN INVESTORS NEED TO KNOW ABOUT TAXES IN VIETNA

Foreign investors whom set-up company in Vietnam always face challenges to understand the tax system in Vietnam. The below briefly explains type of taxes in Vietnam for regular enterprises. In special cases, foreign enterprises are suggested to consult with tax lawyers in Vietnam before establishment and during the operation to ensure compliance.

Major taxes which enterprises including both local and foreigners are subject to are corporate income tax, import and export taxes, and value added tax, and their employees are subject to personal income tax. Other taxes might be applicable depending on nature of business, such as natural resource tax, special consumption tax, and foreign contractor tax.

Corporate income tax (CIT) is governed under Vietnam Law on Corporate Income Tax. CIT is calculated by multiplying assessable income with the CIT rate. Assessable income is the difference between sales revenue and deductable expenses. In general, CIT tax rate in Vietnam is currently 22% and will be reduced to 20% starting Jan 1st, 2016.

Export and Import tax are governed under Vietnam Law on Export tax and Import tax. Export of finished goods is encouraged and export tax is 0%. Import tax will be as import tax tariff published by the government unless exempted for reasons of import to process for export, import to create fixed assets other other cases as the laws regulated.

Value added tax (VAT) is governed under Vietnam Law on Value added tax, applicable to goods and services sold in Vietnam. VAT is calculated by multiplying taxable price and VAT rate. The most common VAT rate is 10%. The rate level of 5% and 0% are applicable in certain cases.

Personal income tax (PIT) is governed under Vietnam Law on Personal income tax. Tax payers are resident, which taxable income includes income generated both inside and outside of Vietnam; and non non-resident, which taxable income includes income generated from Vietnam, regardless of the place where it is paid or received.

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HOW TO RECOGNIZE FATHER OR MOTHER FOR A CHILD?

It is a legal requirement in Vietnam to register the recognition of father, mother of a child regardless the child’s parents are married or not. Such recognition shall be made on the newly issued birth certificate of the child.

The recognition of the father, mother protects the legal rights of all involved parties. For the family involving foreign elements i.e foreigners, expatriates living in Vietnam, the procedure for recognition of father, mothers of a child have to follow the laws of Vietnam, through various steps at Vietnam Authority including People’s Committee, Provincial Department of Justice and at Consular of foreign country where the mother or father of the child comes from.

The dossiers of application for recognition of fathers, mothers or children shall include the following papers:

1. The application for recognition of father, mother of the child;

2. The copies of the ID (for Vietnamese citizens staying in the country), or passports or substitute papers (for foreigners and Vietnamese citizens in foreign countries);

3. The copies of the birth certificates of the persons to be recognized as child;

4. Papers, documents or evidences (if any) to prove that there is a blood relationship between the father or mother and the child;

5. The copy of the household registration book or collective resident certificate (for Vietnamese citizens permanently residing in the country);

6. The permanent residence card (for foreigners permanently residing in Vietnam) of the persons to be recognized as father or mother.

Documents issued in foreign language shall need to be translated into Vietnamese, notarized or legalized to conform with legal document requirements of Vietnam authorities.

The time for processing dossiers at various authorities depend on the submitted documents and the time taken by the authorities to validate the case and could range between two weeks to two months.

The Vietnam authorities will need to study and examine dossiers of application for recognition of father, mother of the child. In cases where there is any doubts, complaints or denunciation about the recognition of father, mother of the child, or whether it is deemed that the personal identification of the involved parties or papers in the dossiers of application need to be clarified, the Provincial Department of Justice shall carry out the verification, including interviews with the involved parties or request for the additional proof.

Once the application is processed, verified and confirmed, the revised birth certificate of the child will be issued to reflect the changes which will show the name of the father or mother added.  

For advice or service request, please contact us via email ant@antlawyers.vn, or call +84 8 3520 2779.  To learn more about us, please visit www.antlawyers.vn.  

ANT Lawyers is a Vietnam law firm with international standards, recognized by IFLR1000 on Financial and Corporate practice.  We are an exclusive Vietnam member of Prae Legal, the global law firm network covering more than 150 jurisdictions.  The firm provides a range of legal services as following to multinational and domestic clients.

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HOW TO ESTABLISH A COMPANY IN VIETNAM

Foreign investors may invest in the form of 100% capital to establish a limited liability company, joint stock company, partnership company or other forms in investment in Vietnam.

Foreign investors that invest in Vietnam for the first time must have investment projects and fill in investment registration or examination procedures at state agencies in charge of investment in order to be granted investment registration certificates. Investment certificates shall concurrently be business registration certificates.  Company with 100% foreign capital has founded and operated from the date of issuance of the investment certificate.

A project dossier for establishing a company in Vietnam shall comprise:

• Registration/Request for issuance of Investment Certificate;
• A report on financial capability of the investor;
• Draft of the company’s charter;
• List of members of company: a) copy of the people’s identity card, passport or other lawful personal certification, for individual members; b) copy of the establishment decision, business registration certificate or other equivalent document, for member organizations; copies of the authorization document, the people’s identity card, passport or other lawful personal certification, for authorized representatives. Copies of the business registration certificates of the foreign member organizations must be authenticated within three months before the date of submission of the business registration dossier by agencies where such organizations are registered;
• Written authorization of the investor in case investor is organization and valid copy of the lawful personal certification of the authorized representative. Documents in foreign languages must be translated into Vietnamese, notarized and legalized;
• The joint-venture contract or Business Cooperation Contract (BCC);
• Other documents required by Vietnam law.

The establishment of a company in Vietnam would take from 30 days.  The extra time might be needed in case theinvestment area is conditional or the State government needs to examine the investment project.  Minimum capital, special licenses or other conditions might be required in certain investment projects.

At ANT Lawyers, a law firm in Vietnam with law offices in Hanoi and Ho Chi Minh City, we are available to assist clients in establishing foreign owned company in Vietnam.  We could be reached at email: ant@antlawyers.vn or office tel: +84 912 817 823.

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WHAT TRANS-PACIFIC PARTNERSHIP AGREEMENT IS ABOUT?

On Jul 31st, 2015 the Trans-Pacific Partnership (TPP) negotiation ended without a resolution although a great progress has been made. The sad thing is that “they finished the part of the agreement that would raise environmental standards in Vietnam, Malaysia and the other countries in the bloc” according to The Wall Street Journal. It is expected the deal will continue to be worked on in the upcoming future meeting.

US, Japan, Vietnam and 9 other countries hoped to complete the signing of TPP in 2015. If successful, TPP is expected to be a major event occurred to Vietnam in 20 years (from the time Vietnam and the United States decided to normalize relations in 1995).

1. TPP is a free trade agreement between 12 countries with the aim of promoting economic integration in Asia – Pacific area. Twelve members of TPP include Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Canada, Peru, Singapore, Vietnam, the USA and Japan. South Korea, Colombia, Costa Rica, Indonesia, Taiwan, Thailand and many other countries are planning to participate in TPP. Originally, TPP started from an agreement among Singapore, Chile, New Zealand and Brunei in 2009, before the United States decided to join and lead.

2. The main objectives of TPP are the elimination of taxes and barriers for goods and trading services between member countries.

3. In addition, TPP will also unify laws, common rules between countries, such as intellectual property, food quality or work safety.

4. The current members of TPP accounted for 40% of the world GDP and 26% of global merchandise trade.

5. The United States expects the TPP will be the key point of their new destination in Asia. China has sometimes expressed their intention to join the TPP, but many of TPP’s current provision seem to be designed not to let China have the opportunity to participate in this agreement.

6. TPP is expected to set out the international rules that transcend the scope of the WTO, such as investment policies, protect intellectual property rights, control of state companies, and the quality of product and labor.

7. TPP is expected to create international laws capable of adjusting the policies and directions of the law in each member countries. In other words, the laws of the member countries will have to follow the orientation of the TPP. Many laws in TPP also influence the changes of the legal regime of the country. For example is the legislation to encourage the members of the TPP to open a government agency, with mechanism and the way to work like in the US to perform strengths-weaknesses analysis before issuing new domestic laws.

8. TPP includes 29 chapters, in which there are only 5 chapters are directly related to the issue of exchange of goods and services, the remaining chapters addressed many issues related to different benchmarks, standards about environment, labor quality, financial rules, food and medicine. TPP will remove many benefits of state companies which is currently playing a big role in i.e. Vietnam economy, to create competitive opportunities for private companies.

9. With TPP, foreign and international companies, corporations will be able to bring the government of the member country to TPP’s special court when these countries pose the rules that go against the norms of the TPP. This special court has full authority to make the government to compensate for damage not only occurred, but also the loss of opportunities in the future of international corporations, companies.

10. The TPP members have to sign non-disclosure agreement in the detailed negotiation process about the rules of TPP. These countries may only disclose information to government agencies, organizations, and individuals that are directly related to trade policy advisory.

For advice or service request, please contact us via email ant@antlawyers.vn, or call +84 8 3520 2779.  To learn more about us, please visit www.antlawyers.vn.  

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FOOD AND FOOD SUPPLEMENTS REGISTRATION IN VIETNAM

Proclamation of quality specifications of imported food and food supplements.

To ensure imported food and food supplements are safe to eat, as well as to protect consumer through the control of imported food and food supplements quality, the Vietnam Food Registration Agency requests the imported food and food supplements to be complied with the proclamation standard procedures.

ANT Lawyers is capable to carry out proclamation of quality  specifications procedures in Vietnam for clients being manufacturers, importers and distributors.

ANT Lawyers services include:

• Provide consulting advice relating to proclamation of quality specifications of products.
• Act as authorized representatives to draft documents, filing of statement with the competent State agencies.
• Provide consulting advice to overcome the problems arising in the course of registration;
• Act as authorized representatives to draft documents, filing of application at the competent State agencies.
• Authorized representatives to draft documents, filing for certificate extension at the competent State agencies.

A number of documents to be provided:

• Products specifications;
• Product label;
• Samples;
• Copy of the business registration certificate;
• Certificates of Good Manufacturing Practice (GMP), Hazard Analysis and System Critical Control Point (HACCP);
• Certificate of Free Sale or Health Certificate;
• Power of attorney;

Please contact ANT Lawyers for more specific advice to ensure compliance with the laws of Vietnam by inquiries through email ant@antlawyers.vn or call our partners directly at  + 84 912 817 823.

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